Income-tax Act, 1961Section 80-IAC
- 100% of profits for 3 consecutive years out of 10
- Eligible start-ups incorporated within the notified window, with IMB certificate
Applies to FY 2025-26 (AY 2026-27) and earlier years.
IT Act 1961 → 2025 / Section 80-IAC
DeductionsSection 80-IAC → Section 140
100% profit deduction for eligible start-ups for 3 out of 10 years
Section 80-IAC of the old Income-tax Act, 1961 · new section 140 under the Income-tax Act, 2025
New reference Section 140
Income-tax Act, 2025Section 140
- Same deduction, now section 140
- Eligible start-up turnover limit ₹300 crore (raised from ₹100 crore by Finance Act 2026)
- Any 3 consecutive years out of 10 from incorporation
- No splitting up/reconstruction or used plant
Applies from tax year 2026-27 (from 1 April 2026).
What changed
Renumbered, with a real change: from 1 April 2026 the Finance Act 2026 raises the start-up turnover ceiling from ₹100 crore to ₹300 crore (section 140(16)(b)(ii)); incorporation must be before 1 April 2030.
Practice notes
- ESOP tax deferral for start-up employees links to section 140 (see section 289(3)).
Frequently asked
What is section 80-IAC called in the new Income Tax Act 2025?
Section 140: 100% profit deduction for eligible start-ups for any 3 consecutive years out of 10.
What is section 80-IAC called in the new Income-tax Act, 2025?
Section 80-IAC of the Income-tax Act, 1961 corresponds to Section 140 of the Income-tax Act, 2025, which applies from 1 April 2026 (tax year 2026-27).
What changed in section 80-IAC under the new Income Tax Act?
Renumbered, with a real change: from 1 April 2026 the Finance Act 2026 raises the start-up turnover ceiling from ₹100 crore to ₹300 crore (section 140(16)(b)(ii)); incorporation must be before 1 April 2030.
Is section 80-IAC still applicable for FY 2025-26?
Yes. Income of FY 2025-26 (AY 2026-27) and earlier years is governed by section 80-IAC of the 1961 Act. Section 140 of the 2025 Act applies from tax year 2026-27.